Re. No NDAs: What SHOULD Idea People Do?

I just finished reading your post regarding not signing NDAs and I was wondering if you might be willing to share your insight as to how I might want to proceed in something similar (in other words, what is the appropriate way to develop an idea when one does not have the programming skills)? Everyone wants to protect their ideas, but how do we do so and see them through to fruition rather than be a simple pipe dream?

Just like in your post, I have an idea which I can not implement and it is rooted in a couple of ideas/websites. I do not necessarily consider it original, but I do see an opportunity for it as it has not been executed yet. I actually want to approach a specific website with this idea as I believe they would be the best fit for this project/expansion. I believe I fit into your A category; I know they would blow me out of the water if I were to develop my idea independently of them. My problem is that I am not really sure how to get my foot in the door and be taken seriously, while at the same time protect myself from them just saying “thanks for the idea, the door is over there.”

I did appreciate your point on the “90/10” split. I have always thought that I would love to get 10% for my idea, but my assumption has been even that would be extremely high considering the web site would be putting up the money and doing all the work (and “the door is over there”).

I would greatly appreciate it if you might be able to give me some feedback and pointers as to what I should actually do.

Thank you for your time,

…

After meticulously detailing the ins and outs of NDAs for developers, it’s super interesting to consider things from the other side of the table. What is a good way for someone in that position to see their idea become something?

I mulled it over a while, and this was my reply:

Hi ______,

Your situation is a tricky one to make work in the way that I think I’m hearing you want it to: getting 10% for putting up the idea and little else. To folks like me and people running already off-the-ground companies, there is virtually zero appeal to what you are describing, and as you surmise they are apt to indicate to you where the door is.

Why? It’s not that a good idea might not be a net win to execute fully for 90% of the market reward, that could happen. Though a long shot, it conceivably might make economic sense to do. The thing is that that premise is predicated upon “they’re all out of ideas, and would love to jump on the chance to do something new”. That is almost NEVER the case: most businesses, (especially in the web world with its ever evolving and innovating nature), have no shortage whatsoever of ideas and initiatives that they could be pursuing to further and better their business. Everything they do is a trade off against other conceivably great things they could do, which makes picking something that entails a dormant idea partner highly unattractive.

I think the thing is for you then that you’ve gotta bring something more to the table than the idea. Something about how you are the best person in the world to lead its execution and willing to come on board as part of the team to make you baby fly, or how much secret sauce and tangible development you’ve already done and our willing to share, or the resources or connections you can bring to the party. Any of these constitute a tremendous boost to the desirability of your offer.

If you’re not prepared to do so, there may be to confront the bitter truth that the idea, though great, might not fetch by itself what you think it should fetch in the market. At which point you can either offer it up gratis and see what happens (and perhaps see what credit and esteem as an innovator it fetches you), or keep it to yourself (either forever and let it die with you, or until the someone else thinks of it independently, or until things shift where you have an stronger opportunity to get it going either solo or in partnership).

Whew, I think I just wrote out a flow chart in that last paragraph! I hope this, while probably not an ideal assessment of your situation, is useful food for thought, and of course it’s just my opinion–certainly not the final say on how things will necessarily go in the real world.

Thanks for the shout out, and good luck!

John

Like I said to her, this probably isn’t an ideal assessment: it’s kind of a downer, and I’m stumped to offer up a more constructive take1.

I’m also completely open to being wrong on this one: I’m just one dude, and come from a vantage point that is certainly sensitive to and biased against overvaluation of ideas.

Can anyone help me with this? What would you offer up as advice to this situation?

Notes:

There is though one facet of my reply that I goofed on: I wrote as though she was hoping for 10%, but to her credit I see now she already knew that was probably too high. My overall response would be the same for 2%. ↩

“What if I told you that there was a way to get your idea built, with no programming skills, and you get to keep 100% of your profits?”

(“Entrepreneur” leans in)

“Cold.
Hard.
Cash.”

Seriously though, unless she’s bringing something to the table other than an idea she came up with in the shower then it’s worthless. If I wanted to work on a dubious idea for no money then I have plenty of those of my own.

Does she have a track record of success? A list of customers who have prepaid deposits? Amazing connections to people you’d never be able to meet otherwise? Market research that backs up her hypothesis that there is demand for the idea?

I see a lot of these requests too and my advice is usually along the lines of: Read “Getting Real”, “Four Steps to the Epiphany” and “The E-Myth Revisited”, strip the idea down to a minimum viable product, save up $5-10k in cash (or raise it) and have a prototype built so you can test your idea on real customers.

The sender of that e-mail assumes that “the idea” is something that said websites haven’t already considered.

S\he needs to look at things from their point of view. Someone approaching them with an NDA is looking for money. And the subject of said NDA is probably either useless or something that they already know. Since signing the NDA opens them up to liability….

Not so fast with the “ideas are everywhere and of little intrinsic value”. Simply not true. The best ideas never see the light of day for the very reasons the poster pointed out. Some of the worst ideas make it to prime time for all the wrong reasons (who you know etc). The barrier to capital confronts every aspiring entrepreneur, you must over come it to succeed.

While admitadly many ideas are crap in and of themselves – they may be of higher value when viewed as part of a larger problem solving process in getting to market. In other words, solve the ‘know it all cynic’ barrier to capital by finding creative approaches to funding (Kickstarter etc). In fact innovate your way around every obstacle you face and you will eventualy find yoursef in the game – no NDA required.

When start up rock stars pursue bad ideas then abandon them for better ones we crow about their ability to ‘pivot’. So by all means innovate, create and pivot your way to success, but promise to not be a barrier to others when you arrive.

Forget about people stealing your idea. Thousands of people in the world are going to have the same idea that you have. I have seen successful movies, games with “my idea”, but in reality they had my idea too. Difference is in execution of the idea.

Ideas are not only worthless by itself, but usually wrong too.

I gave you an example: Christopher Columbus: He had this (absurd) idea that as the world was round, he could go to India the other way around. It was one of the worst ideas ever. He found land at 6.000 km but India is 25.000 km away!!(use google earth and you will see half of the world is the Pacific Ocean but it does not show on maps and there is no land. Had no been land in center of America , he would had died.

Taking action over this absurd idea he got somewhere even more important that the original idea. Remember that he died believing he got to India(the reason indians are called indians).

You can’t negotiate 10% of something just for having the idea, because when you implement an idea you discover it takes much more effort that what you calculated in the first place. This is a universal law, I tell you as someone that is executing some of his ideas and had seen a lot of people do that. So if they promise you 10% they carry the risk. Remember Steve Jobs said that had he known how much work it was going to be Apple, he would had never done that. And we are talking about f*cking Steve Jobs kind of ideas!!.

If you want to be the “ideas” guy learn design so you can justify your ideas in front of other people and partner with people that does things. Or become entrepreneur and learn how to materialize them.

A thousand people may have the same idea. But what I think is important is if you have validated that idea. If you have seen that idea work in some context and know why it works it is valuable. And for someone implementing that idea, it makes sense to walk with the person who has seen the target than someone shooting in the dark, though both may be shooting at the same place. Ideas I think are not the one statement describing the idea, but the true understanding behind that statement. Hence though you can give your idea to someone, the understanding and the fact that you have validated it still remains with you.

As someone in the videogame industry, I hear all the time – “I have the BEST idea for a videogame!” Usually followed by “And if you make it, I get 50% of the profits.”

I’ve been designing videogames since I was 8 and wrote a system on my Coleco Adam in Logo so that my friends and I had a pretend control console for our spaceship. (Anyone remember G-force?) I’ve been doing it professionally for 16 years. Jose nailed it. It’s about executing. If you don’t bring a team, some tech, or some cold. Hard. Cash. To the table, I don’t even want to talk to you. In fact, do you even hear how cocky it is to say “I have an idea that is SO FREAKING AWESOME that none of you mere mortals could ever have thought of it!”

I’m an idea guy, so I could make an amazing living selling ideas. It is not in my best interest to say this, but it’s the truth:
Get. Over. Yourself.

In fact, it’s worse than neutral for an established company to hear your idea. I have seen it happen where someone comes to the table, pitches an idea, and it turns out we already had something similar in development. We decide not to go forward with the idea, and release the one we were already working on. It’s similar in some ways, but a) predates the discussion, and b) is different in other ways. Still, the person who pitched the idea accuses us of stealing ‘their’ idea. I’ve seen publishers taken to court over it – even with an NDA in place.

So, actually, I DON’T WANT TO HEAR YOUR IDEA. I have my own ideas that I want to (and am capable of) working on. I want you to show me a working prototype, some customers, and some tech. I want to be your enthusiastic customer.

But if all you have is an idea, then take it to starbucks and see if they’ll give you a venti mocha hazel-double-extra-hot no-fat whippacino on credit for it, and you’ll have a good idea of its value.

She’s quite lucky – her idea is a web based application. The joy of web apps is that it really doesn’t take that long to learn how to build a prototype. It takes years to get good at it, but if she started learning today, she would have a functional prototype by the end of the summer. The prototype may not be any good, it may never be able to scale past 250 concurrent users, and the code quality could be atrocious. However, it would be a working, functional prototype that she could use to validate her idea, attract investors and co-founders.

I love how the ‘Hi John’ letter completely ignores the possibility of paying for the work. Does she come from a privileged world where if she wants something other people have to accommodate her for free? Does she think that if she’s got the money to pay people, other lone programmers are going to out pace the development of her project for which she’s paying 1 or more full-time programmers? While she’s panicking over the prospect of people stealing her idea, has she even thought about what she will do when another company copies her idea and makes a better site that starts stealing her business?

There is something even more necessary than implementation of an idea! It’s called MONETIZATION ! So what an “ideas person” needs to do is to create a marketing plan, a business plan, work out who to sell to and how to make money out of the idea. What PR is required and when. In a nutshell … the Ability to SELL !!! Consider two scenarios:

1. “I have an idea. You sign a NDA and pay me 10%” – “Thank you. There’s the door, please close it behind you.”

2. “I have an idea. In x months I project that it can make you $y. I have a marketing plan and a draft business plan. I have spoken to n potential customers who are ready to buy. While my idea gets implemented I could increase sales on your current products by $z.” – “When can you start?”

Aaron, you sir seem just as bitter as I am in regards to the something for nothing scheme. “Oh, you’re a developer?! Alright I have this idea, take a listen as I ramble for 30 minutes”. If you are polite enough then you just nod and zone out. To me this is not ok. We have become a means to get rich quick. People have been fed that all their ideas can be created as an app and sold on the market for bezillions of dollars. Here’s their business plan.